By December, one in eight UK bank branches open in January would have closed, new figures show.
Almost three-fifths of the bank branch network have vanished since 2015 and a total of 636 bank branches are due to close by the end of this year, with 424 shut so far, analysis by Financial Times based on data from ATM provider Link shows.
As the year comes to a close, high-street banks are continuing to announce closures, forcing many people who rely on these buildings, to find other ways to bank.
Bank branch closures peaked in 2017, when 869 branches closed, at a rate of over 70 a month, according to Which?, which has been monitoring closures since 2015.
The consumer champion said 792 sites were shut in 2018, and 444 in 2019.
Some plans to shut branches were paused during the pandemic, and 369 were closed in 2020 But by the subsequent year, 735 bank branches closed, followed by 662 in 2022.
But the closures have raised concerns that many people will now have a limited access to cash.
The Government addressed the problem last month, with a framework document that aims to ensure that the majority of people and businesses would have to travel no more than three miles to access cash free of charge.
The Treasury said: “While the country is moving further away from using coins and notes with the number of online payments rising from 45 percent to 85 percent in the past 10 years, cash can still be an integral part of many businesses and people’s lives.”
The Financial Conduct Authority (FCA) can hold banks and building societies to the new rules, and has the power to fine them if they do not.
Derek French, a former NatWest executive, said; “For people who are less well off, they can find great difficulty in budgeting if you’re waving a phone or card and don’t get a receipt.
“Cash may be declining but I do think there’s a strong case for having it as an option when you look at the population as a whole.”
Chris Holmes, a Conservative peer and a long-time campaigner for greater equality around access to cash access, said: “What point is having access to cash if you have no place to spend it?
“It’s really critical that everyone understands that point, or there will be certain communities who risk being excluded.”
Sam Richardson, deputy editor of consumer rights magazine Which? Money said: “A closed bank branch doesn’t just mean one less place to withdraw or deposit cash locally.
“[It] also makes getting access to face-to-face banking services harder — something that is particularly important for more vulnerable customers.”
In addition to the more than 100 branches closing or closed in London this year, the cities of Southampton, Norwich, Dundee and Leeds will all lose multiple branches by the end of 2023.
Consumer group Which? estimates that after this year’s closures, there will be just over 4,000 branches left across the UK, with 5,600 having closed since January 2015, when it began tracking the data.
Banks have been cutting back expensive branch networks for decades, but the rate has grown with the increased uptake of digital alternatives in recent years and was supercharged by the pandemic.
Many of those unable to visit a local branch will soon find help in the shape of a banking hub, which are set to pop up across the country. Bank hubs are a collaboration between the Post Office and lenders in communities without branches. However, the speed of their rollout has been criticised due to slow release of them.
John Howells, chief executive of Link said: “I think we will see more branch closures, but crucially, we will see hundreds more banking hubs, and banks will have to stay open until that new hub is live.”
Seven of these hubs, which are managed by post offices, have already been launched, with more than 60 in total planned for across the UK.
The hubs are funded by the banks and designed to offer “back to basics” banking for communities who have seen traditional branches disappear. Customers are able to use the hubs, which are essentially shared bank branches, to deposit money, make withdrawals or pay utility bills.
Nearly all major banks are represented at the hubs, including Adam & Co, AIB, Bank of Ireland, Bank of Scotland, Barclays, Cahoot, Coutts, Co-Operative Bank, Danske, First Direct, Halifax, Handelsbanken, HSBC, Lloyds, Metro, Nationwide, NatWest, RBS, Santander, Smile, Starling Bank, TSB, Ulster Bank and Virgin Money
